Legislating a New Financial Ecosystem
Canada is dismantling the barriers protecting its financial sector. Following the inclusion of the Consumer-Driven Banking Act in the 2025 fall budget and its subsequent Royal Assent in March 2026, the federal government is building the regulatory infrastructure to force standardized, secure data sharing between legacy institutions and third-party providers.
Breaking the Monopoly on Financial Data
The new law does not force data sharing by default. Instead, it creates the common rules necessary for sharing to occur safely and at scale, says Rajesh Vijayaraghavan, an assistant professor of accounting at the University of British Columbia’s Sauder School of Business. By putting control into the hands of consumers, the framework aims to reduce information asymmetry. Currently, banks hoard proprietary data—transaction history and payment behavior—that locks smaller fintech firms out of the market. The legislation shifts that power, forcing established institutions to compete on product quality rather than data exclusivity.
The Looming Shift to Open Insurance
Beyond banking, industry observers see a clear pathway toward “open insurance.” This evolution would allow customers to share sensitive claims history or underwriting details with third parties to secure better rates. Stephen Decoteau, senior vice president of actuarial services and underwriting at Desjardins General Insurance Group, notes that open insurance could offer more transparent experiences, provided that strong safeguards regarding consent and privacy are maintained.
The economic stakes are high. A 2026 report from the Competition Bureau of Canada, Your Data, Your Control, estimated that data portability in the insurance sector could save Canadians significant sums annually by reducing the friction associated with comparing and switching providers.
Navigating Provincial Jurisdictions
Success hinges on harmonizing federal data portability rules with provincial insurance regulations, according to Donna Galloway, chief financial officer of Open Finance Network Canada. Despite these hurdles, the Interac payment network serves as a precedent for national interoperability. Vijayaraghavan argues that consumer trust remains the most critical factor for adoption, particularly because insurance data—which includes medical records and driving habits—is significantly more sensitive than standard banking transactions.
Securities and the e-KYC Frontier
The British Columbia Securities Commission (BCSC) is now weighing how these changes reach capital markets.
A Global Race for Data Portability
Canada is playing catch-up on a global scale. More than 140 jurisdictions worldwide have initiated open banking or open finance programs, with the United Kingdom, the European Union, Australia, and Brazil serving as prominent examples. Brazil has already moved to include insurance, pensions, and capitalization products in its regulated data-sharing framework.
The Department of Finance will conduct consultations over the next 12 to 18 months to develop a second phase of the framework, expanding both functionality and the types of participants involved. This phased approach is intended to ensure that as the ecosystem integrates, consumer protection and data security remain central to the transition.
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